Industry Insights
The global sauces, dressings and condiments market was valued at USD 124.58 billion in 2017 and is projected to reach USD 173.36 billion by 2025. The market is estimated to grow at a CAGR of 4.22% from 2017 - 2025. The market witnesses a considerable growth as a result of growing urbanization, consumer inclination to try several cuisines, and increasing availability of low fat substitutes and increasing preference for organic and natural ingredients worldwide.
Sauces, condiments, and spices are an essential part of nutrition in human history, which has played a significant role in the development of cultures and culinary art around the globe. These items contribute in the form of color, texture flavor and aroma to the culinary art. The sauces and condiments also represent the culture and history of a particular region. For instance, ketchup which is widely consumed in American countries was originally created in Asia.
Driven by a health focused approach, people are increasingly avoiding the consumption of artificial additives and genetically modified edibles. Furthermore, rising trend of introduction of gluten free products is gaining traction as a result of awareness regarding the adverse effects of unhealthy eating in long run. Sauce and snack companies are launching gluten free variants in the market. For instance, Del Monte’s products such as tomato sauce, sauce with basil and no-salt added tomato sauce initially had gluten in them, however now they have introduced gluten free products with gluten content as low as 20 parts per million.
Another major reason for the growth of this market is the increasing cross-cultural interaction and rising popularity of the international cuisines is in turn leading to the development and commercialization of sauces, dressings and condiments across the globe. In addition, increasing demand for the convenient food preparations as a result of hectic lifestyles and need for leisure has escalated the demand for these products in the coming years.
This has resulted in the commercialization of the ready-to-use dressings and sauces such as pasta, blended and pizza sauces along with the focus on convenient packaging solutions. Moreover the manufacturers are introducing the products free of artificial additives, low fat alternatives and with low sugar and salt content catering to the changing lifestyles of the consumers worldwide.
Segmentation by Type
• Table sauces and dressings
• Dips
• Cooking sauces
• Paste and Purees
• Pickled Products
The table sauces and dressings accounted for the largest segment, valued at USD 51.58 billion in 2017 and represents the fastest growing segment as well. The industry is growing at a CAGR of around 4.22% from 2017 to 2025.
The market growth is majorly due to the increasing preference for international flavors and variants over the conventional table products such as mustard, mayonnaise and ketchup. Also, this segment growth is attributed to the capability of demonstrating spicy qualities and increasing demand for hot sauces such as hot salsa sauce, chipotle, Sriracha, habanero and others. Furthermore, changing culinary trends and rising demand for ethnic cuisines where these products are used as an ingredient will further favor the market growth. Cooking sauce segment accounted for second largest segment with a market share of more than 16% in the year 2017 and is expected to record a CAGR of 3.86% from 2017 to 2025.
Segmentation by Distribution Channel
• Supermarkets and Hypermarkets
• Specialist Retailers
• Convenience Stores
• Others
The super and hypermarkets accounted for the largest distribution channel contributing a market share of around 35% in 2017. This segment holds a prominent share owing to its wide range of presence and availability. These products are offered under frequent discounts as a promotional activity, which is attracting consumers to buy from supermarkets and hypermarkets.
Followed by super and hypermarkets, the convenience stores represent the second largest distribution channel, accounting for around USD 32 billion in the year 2017. The growth of this segment is attributed to the quick service with regards to the billing time. These stores are very helpful for a buyer when they have no plans to travel to a supermarket and guide the consumers to their desired products.
Segmentation by Region
• North America
• U.S.
• Canada
• Europe
• Germany
• UK
• Asia Pacific
• India
• Japan
• Central & South America
• Middle East & Africa
The Asia Pacific is dominating the market with a revenue of USD 60.49 billion and growing at a CAGR of 5.26% for the forecast period. The growth of the region is driven by countries with diverse culture and cuisines such as China, Japan, and India. China generates the largest revenue in this region, owing to the busy lifestyle and increasing craze for fast food items. China will continue to dominate in the Asian region in the coming years with the increasing popularity of these products in commercial as well as household use.
Furthermore, the governments of certain countries are offering subsidies on the import of sauces thereby providing opportunities for the manufacturers of these products. For instance, as per KAFTA, Korea-Australia Free Trade Agreement tariff on prepared mustard and tomato ketchup was reduced to 3.4% in 2017 as compared to 4.5% in the year 2016 and is anticipated to be eliminated by 2020. Also, the tariff on tomato sauce is reduced to around 31% in 2017 as compared to more than 35% in the year 2016. Such tariff cuts provide favorable business opportunities to Australian exporters to enter the South Korean market
North America is the second largest consumer, accounting for revenue of USD 35 billion in the year 2017. The major market share of the region is owned by the U.S. as this country is the largest consumer and importer of these products. This region continues to witness growth in coming years though there is a shift in consumption pattern towards flavored and organic preparations.
Competitive landscape
The global sauces, dressings and condiments market is consolidated in nature on account of the presence of few players contributing a major share. Kraft Heinz Co, McCormick & Co Inc., and Campbell Soup Co. accounted for the leading players in the U.S. market together accounting for more than 24% of the total retail sales. Other key players in the industry include General Mills Inc., Nestlé, ConAgra Food, Inc., Unilever, Mars, Incorporated and its Affiliates, CSC BRANDS, L.P., OTAFUKU SAUCE Co.Ltd.
Major players are concentrating and expanding their base in emerging economies such as China, India, and UK. The market players are focusing on the mergers and acquisitions to ensure string foothold in the industry. For instance, McCormick & Company acquired food division of Reckitt Benckiser’s in August 2017 and the deal was valued at USD 4.2 billion. This acquisition rendered the former company to strengthen its presence in condiments, and hot sauce categories. In addition, the manufacturers are focusing on introduction of healthy and low fat products. For instance, Cobani Savor with have come up with Greek flavor yogurt which is positioned as topping or a condiment which is available in low fat category.
